Protecting Nonprofit Nonpartisanship | Common Questions and Answers

Common Questions and Answers

 

Why Does Nonpartisanship Matter?

Nonpartisanship is a cornerstone principle that has strengthened the public’s trust of the charitable community. In exchange for enjoying tax-exempt status and the ability to receive tax-deductible contributions, 501(c)(3) organizations – charitable nonprofits, including religious congregations, and foundations – agree to not engage in “any political campaign on behalf of (or in opposition to) any candidate for public office.” The quoted and highlighted text is often referred to as the “Johnson Amendment” because it was proposed by then-Senate Minority Leader Johnson to legislation signed by President Eisenhower in 1954.

That provision of law protects the integrity and independence of charitable nonprofits and foundations. It shields the entire 501(c)(3) community against the rancor of partisan politics so the charitable community can be a safe haven where individuals of all beliefs come together to solve community problems free from partisan divisions. It screens out doubts and suspicions regarding ulterior partisan motives of charitable organizations, as undoubtedly would occur if even just a few charitable organizations engaged in partisan politics. Nonpartisan credibility is critical to the ability of 501(c)(3) organizations to work with elected officials of all parties at the local, state, and federal levels to address community needs.

Weakening the law by allowing leaders of individual 501(c)(3) entities to endorse candidates for public office and engage in limited partisan electioneering activities would damage the integrity and effectiveness of all charitable organizations and spawn litigation as innovative partisans seek to expand gray areas in the proposed legislation. Repealing the Johnson Amendment would damage the federal Treasury as people take tax deductions for political contributions they could then funnel through charitable nonprofits, undercut fair elections by providing a loophole to avoid campaign contribution disclosure laws, and empower politicians to exert pressure for access to foundation assets and charitable funds for their own partisan campaigns rather than for the public good.

Does the Johnson Amendment Need Fixing?

No. In recent weeks, the President vowed to “get rid of and totally destroy the Johnson Amendment,” the Chairman of the House Ways & Means Committee said he intends to repeal the law as part of comprehensive tax reform, and the House Majority Whip became a lead sponsor of one of the bills to weaken the protection. That legislation (H.R.781; S.264) would blur the current clear language (quoted above) that conditions tax-exempt status and the ability to receive tax-deductible contributions in part on not engaging in partisan, election-related activities for or against candidates for public office.

Proponents of the legislation, primarily a subsection of the broad religious community, generally focus on perceived restrictions on preachers who say they want to speak out about issues of the day and endorse candidates from the pulpit. Most commentators, however, emphasize the legal reality that charitable nonprofits, including religious congregations, already are free to speak on important matters of the day and advocate on public policy issues and legislation. Private foundations, while barred from most lobbying activities, are free to engage in public debates, promote public education efforts, and fund a wide range of issue-focused activities. Section 501(c)(3) of the federal tax code merely prohibits campaign intervention, defined to include endorsing or opposing candidates for public office, publishing or distributing statements for or against candidates, or using tax-deductible and other resources to support partisan campaign activities. See the recent Chronicle of Philanthropy article for a more detailed description of the arguments.

Is It Legal for My Organization to Sign Onto the Community Letter in Support of Nonpartisanship?

As noted above, charitable nonprofits have the right to lobby on many legislative issues. Signing the Community Letter in Support of Nonpartisanship is consistent with that legal right. The lobbying rules for private foundations are more restrictive, but in this case, organizations such as the Council on Foundations have determined that signing onto the letter is legal. The Council on Foundations published a statement clarifying that foundation lobbying on this issue is legal under the “self-defense” exception.

What Good Will It Do to Sign the Community Letter in Support of Nonpartisanship?

Nonprofit and foundation voices matters. A minority of individuals in the religious community have made the case to some political leaders that allowing churches and charities to endorse political candidates would be good for those preachers and politicians. The truth is that the vast majority of nonprofit and foundation leaders not only oppose changing the law, but see repeal or revision of the Johnson Amendment as being very harmful to the identity, independence, and integrity of our community. As with many issues, numbers matter. The more charitable nonprofits, foundations, religious congregations, and their many supporters – accounting firms, law firms, corporations that care – that stand up for the community and their missions by supporting nonpartisanship, the stronger is the message that changing the Johnson Amendment is unpopular and viewed as destructive by real people back home. Your voice matters!

What Happens After Our Organization Signs Onto the Community Letter in Support of Nonpartisanship?

The goal is to gather as many signatures as possible before packaging the list of signing organizations from an individual state to then present to that state’s U.S. Senators and Representatives. National organizations will also be included in a separate letter (with the same text) that will go to Senate and House leaders and others.

Organizations can help send the strongest message possible by FIRST signing onto the letter, and SECOND sharing the Community Letter in Support of Nonpartisanship with others and encouraging them to sign on as well. So, share the Community Letter in Support of Nonpartisanship with board members and colleague organizations and ask them to share with others. Whether a charitable nonprofit, a faith-based group, a foundation (community, corporate, family, private, university, other), or a for-profit corporation that cares about the well-being of the 501(c)(3) community, all organizations that believe in the value and importance of nonpartisanship can sign.